Basant's Top Ten :
The Stocks indicated in Basant's Top Ten would generally display the following attributes:-Businesses with strong Moats (Entry Barriers) run by able and honest management.
Businesses that provide a scale of opportunity to grow at 20% or more for longer periods of time.
The business character should preferably be dull and boring where the leader is taking away market share from its competitors.
Sector or Industry leaders - Best in class.
Most of these would be secular growth (non-cyclical) businesses.
Efficient users of capital (High ROCE and ROE) with very little or no debt.
Free cash flow generators with low incremental capital expenditure.
Prospective yield stocks, i.e. the dividend yield might not be too high today but over a period of time the free cash flow should be enough generate sufficient dividend on current market price.
With so many stringent checks is placed it might not be easy to identify too many opportunities hence I intend to have only ten stocks in this section.
Companies in "Basant's Top Ten" will be followed, researched and evaluated very closely and on periodic intervals I may replace one or more of these with new ones to the list. So this list will change dynamically as and when I think appropriate and fit.
Moreover within the list I will try and put these ten stocks in order of our preference. For example if XYZ Co. is listed in No.1 it may be as the best investing bet in the list and ABC should be the next best bet.
Each stock in Basant's Corneris ranked in terms of a Star rating for the two main aspects of investing.
- Business quality and
- Management Integrity.
The quality of business is an offshoot of various factors like cash flows, RoCE, Dividend Payouts, Sustainable growth, sporadic equity dilution etc. Management quality is more subjective and but can be inferred from various financial and non-financial considerations. Star ratings is an indication on business robustness and management quality. it is not a valuation yardstick measure. That is the Star ratings at ITC could be higher then that of Tata Steel though at times it could make more sense to buy Tata Steel then an ITC. This is just an example to explain the Star rating system
| View | Meaning |
|---|---|
| BUY | BUY is more aggressive and means one can buy 60%-75% of desired quantity at current price and then wait for reactions to buy more. Buy means that there is no need to time the market and a position can be initiated or increased at current price. |
| ACCUMULATE | ACCUMULATE means one should buy a small quantity maybe 40% to 50% of the desired level and after having bought the initial quantity, there is no big need to hurry up to buy the rest, keep adding slowly; trying to time the market and adding on every dip. |
| HOLD | HOLD means that after having bought the initial quantity there is no need to add the stock |
| REDUCE | REDUCE means that the stock ought to be sold or reduced according to me but if the member feels too strongly about it he can retain some and sell the balance but should not venture out to add any more shares at all. |
| SELL | SELL means that the story is finished according to me and one should liquidate the stock at the current market price. |
Disclaimer
Any action you choose to take in the markets is totally your own responsibility. Basant Maheshwari will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information. Stock market Investing may result in losses as well as profits. Stock Investing is not suitable for many members of the public and only risk capital should be applied. Basant Maheshwari Financial Services does not take into account special investment goals, the financial situation or specific requirements of individual users. You should carefully consider your financial situation and consult your financial advisors as to the suitability to your situation prior to making any investment or entering into any transactions. If you want personal advice, then you should seek a registered investment advisor